What is an invoice?
An invoice is a formal, itemised document sent by a seller to a buyer as a request for payment for goods or services that have been supplied. It outlines what was provided, the agreed price, and the payment terms and deadline. In Australia, invoices serve as essential business records for tracking income, managing cash flow, and meeting tax obligations.
Types of invoices in Australia
There are two main types of invoices used by Australian businesses:
– Standard invoice: Used by businesses that are not registered for GST. These do not include a GST component.
– Tax invoice: Used by businesses registered for GST. A tax invoice must include the GST amount and is required for any sale over $82.50 (including GST). Customers who are also GST-registered need a tax invoice to claim their GST input tax credits.
What must an invoice include?
All invoices in Australia should include:
- A clear label identifying the document as an invoice or tax invoice
- Your business name and contact details
- Your Australian Business Number (ABN)
- A unique invoice number
- The date of issue
- A description of the goods or services provided, including quantity and unit price
- The total amount payable
- Payment terms (due date, accepted payment methods)
For tax invoices on sales of $1,000 or more (including GST), you must also include the buyer’s name or ABN.
Record-keeping requirements
Under ATO guidelines, all Australian businesses are required to keep invoices and related records for a minimum of five years. Failing to maintain accurate records can result in penalties or complications during an ATO audit. Many businesses use accounting software to automate invoice creation, tracking, and record-keeping.